The U.S. will keep its 27.5% tariffs on European cars in place until the European Union passes legislation lowering duties on American exports. A framework agreement released Thursday lays out the conditions for cutting U.S. tariffs to 15%.
Overview of the Agreement
The trade plan was revealed July 27 after a meeting between President Donald Trump and European Commission President Ursula von der Leyen in Turnberry, Scotland. The EU has agreed to remove tariffs on U.S. industrial goods and improve access for American seafood and farm products. In exchange, the U.S. will reduce tariffs to 15% on most European imports, including cars, semiconductors, and pharmaceuticals.
Trigger for Tariff Reductions
U.S. officials stressed that the lower tariffs will only take effect once the EU introduces the necessary legislation. “The tariff cut is tied to the EU submitting its proposal,” one official said. The framework specifies that the 27.5% rate will drop “on the first day of the month in which the EU presents the legislative measure,” provided it aligns with the agreement.
European Political Reactions
European leaders voiced caution. French Prime Minister François Bayrou called the agreement concerning, while Spanish Prime Minister Pedro Sánchez said it offered limited benefits for Spain due to the country’s smaller trade volume with the U.S.
Industry Reactions
Industry responses were mixed. Spain’s Food and Beverage Federation welcomed the avoidance of a trade conflict but criticized continued export duties. The U.S. Distilled Spirits Council warned that tariffs on European spirits could cost $1 billion in sales and 12,000 jobs, calling for a permanent tariff-free solution.
